A Portfolio Had an Original Value of $7,400 Seven Years

question 26

Multiple Choice

A portfolio had an original value of $7,400 seven years ago. The current value of the portfolio is $11,898. What is the average geometric return on this portfolio?

• A)7.02%
• B)7.47%
• C)7.59%
• D)7.67%
• E)7.88%

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Definitions:

Carrying Value

The book value of an asset or liability on the balance sheet, considering any depreciation, amortization, or impairment costs.

Face Value

The nominal value printed on a financial instrument like a bond or a stock certificate, representing its legal value.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting and investment appraisal.

Fair Value

Fair value refers to the estimated market value of an asset or liability, based on current market conditions and comparable transactions, used in financial reporting.